TIRANA, Nov. 8 – Albanian oil refiner ARMO Company and Canadian-based oil and gas exploration company Bankers Petroleum signed last weekend in Tirana a long-term cooperation agreement, which guarantees the supply of ARMO’s refineries with the gross oil that Bankers drags out from the underground of the territory of Albania. The agreement, signed in the presence of the Deputy Minister of Energy, Sokol Dervishi, and the respective presidents of ARMO and Bankers, Rezart Taci and Abby Badwi, brings a new phase of development for the Albanian market. Through this agreement, “Made in Albania” products will not only be better exploited, but it also means that the cycle will be closed within the country. This will provide cheaper products for the customers, said ARMO in a statement.
“The novelty of this agreement is that Bankers Company guarantees its sale market and ARMO Company guarantees the raw material. As a consequence, we will have a lower cost of production for oil sub-products, better prices for the costumers, new jobs and more income for the Taxing Directorate,” said Taci.
“The agreement we signed with ARMO Company is a very important one, because we have the possibility to send our products to ARMO’s refineries. It has two important advantages: firstly, this is a long-term agreement and secondly, as such it guarantees equivalent prices with international markets,” said Badwi.
“This is an advantageous situation not only for the two main players in this game, which means Bankers and ARMO Company, but this agreement also provides profits even to the Albanian economy. The fact that this product will be refined within the country means there will be new jobs and there will be more income for the community, for the economy, for the improvement of the trade balance and many other effects will come as a result of this agreement,” said Dervishi.
Through this agreement, ARMO, which for months has presented sub-products that reach European standards, such as “Blue Diesel”, is now realizing its ambitions to increase the production capacities and introduction of European standards in production.
“After a year of investments in its technology, ARMO Company has been able to reduce the sulphur emission in the environment by 97 percent, which is too close to European standards. Another novelty is the production of “Blue Diesel”, which has a sulphur percentage of 10 milligrams per kilogram. Thanks to all our investments, we have been able to produce all kinds of sub-products, of course, certified according to the European community standards,” said Taci.
After its privatization, ARMO has taken measures to protect the environment, to improve work conditions and to lower the refining cost. Through this agreement and through the company’s investments, the Albanian market has gained a new dimension and a greater importance in the fuel regional markets.
ARMO fined $2.7m for abusing dominant position
Three months ago, Albanian oil refinery ARMO was fined 271.8 million lek (2.7 million dollars) for abusing its dominant position with the trade of low-grade D2 diesel. The decision was announced on Monday by the Competition Authority after a thorough investigation into the company’s activity for the January-October period last year, when the newly privatized company was granted by government the exclusivity of trading D2 diesel in Albania.
The Competition authority said that ARMO abused its dominant position by applying different prices and trading conditions which put wholesale D2 companies under unfair competition conditions.
The 2.7 million dollar fine imposed under the competition protection law is equal to 2.6 percent of ARMO’s annual turnover for 2009, said the Authority.
ARMO is owned by a US and Swiss consortium headed by Anika Enterprise, a company controlled by Albanian businessman Rezart Taci which in 2008 bought 85 percent of state oil company ARMO for 128 million euros ($183 million).
The company which controls 25 to 30 percent of the country’s oil market has two refineries in Ballsh and Fier, one thermal power plant and some 1,600 employees.
